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MOGADISHU (Reuters) - Somali President Hassan Sheikh Mohamud on Saturday named political newcomer Abdi Farah Shirdon Saaid as the country's new prime minister, a man diplomats say is untainted by the clan rivalry and feuding that has plagued Somalia for decades.

"I know (Saaid) and have selected him because he is competent," said Mohamud, who along with his prime minister face the daunting task of trying to set up Somalia's first effective central government since the outbreak of civil war in 1991.

"I urge the parliament and the civilians to support him," he said in a statement.

Though both the president and prime minister are new in their jobs, they will be confronted by old problems: acrimonious clan politics, rampant corruption, maritime piracy and a stubborn Islamist insurgency.

Mogadishu, which until last year was engulfed in street battles between al Shabaab militants linked to al Qaeda and African Union soldiers, is now a bustling city where bullet-riddled houses are slowly being repaired and replaced.

African Union troops also pushed al Shabaab out of the southern port city of Kismayu last week, the militants' last major bastion after a five-year revolt, but the Somali government still does not control swathes of the country and the security situation remains fragile.

Al Shabaab militants, who say Saaid is a foreign stooge, are likely to hit back with bombings and guerrilla attacks. An al Shabaab suicide bomber on Saturday blew himself up some 30km (20 miles) from Mogadishu, wounding two government soldiers.

"The new prime minister is not different from those before him - they were all brought by Westerners," Sheikh Ali Mohamud Rage, al Shabaab's spokesman, told Reuters.

"He will not change Somalia. We shall fight and keep on foiling the infidel government."

Saaid has been a prominent businessman in neighbouring Kenya and is married to Asha Haji Elmi, an influential Somali peace activist.

A Western diplomat said Saaid had a reputation for being above Somalia's notoriously volatile clan politics, similar to the new president, and the news of his appointment would be welcomed by foreign governments.

"Like all the decisions the new president has made so far, this is a good one, and Somalia is on a bit of a roll with the election of (Mohamed Osman) Jawaari as parliament speaker and Mohamud as president," the diplomat told Reuters.

Mohamud, a former academic and a political newcomer himself, was elected president in a secret ballot on September 10, a result hailed by his supporters as a vote for change.

Matt Bryden, a director of Sahan Research think-tank and former UN-Monitoring Group coordinator for Somalia, said Saaid was the best candidate on the list but added that the inexperience of the duo may prove a potential pitfall.

"We now have a prime minister and president who have never held public office. The key question is what kind of cabinet will they appoint and from where will they solicit and attain advice," Bryden said.

Saaid's appointment as prime minister will have to be approved by Somali legislators, though both analysts and diplomats said this was likely to happen without problems.

"I request the parliament and the Somali people to work with me," Saaid said. "I will appoint the cabinet as soon as possible."

TEAM WORK

Rampant corruption and infighting between the clans are the other two major challenges the new administration will face.

In July, a U.N. Somalia monitoring group report said it had found that out of every $10 received by the transitional federal government between 2009-2010, $7 had never made it into state coffers. Then President Sheikh Sharif Ahmed dismissed those allegations.

Saaid hails from a sub-clan of the Darood clan, which is in line with Somali tradition of sharing the top three political jobs between the main clans.

The president is from the Hawiye clan and the parliament speaker Jawaari belongs to the Rahanweyn clan, a split which analysts said was vital to make sure that the majority of the country feels represented by the new government.

Previous Transitional Federal Governments (TFG) have been characterised by infighting, particularly between the president and prime minister, who always derive from different clans and have to satisfy their own power bases.

"Saaid is very close to the president and so I think we are likely to see the prime minister and president working as a team rather than working as rivals, which was one of the problems that undermined the last TFG," Bryden said.